Shall the authorities impose taxable revenue for household businesses paying taxes under periodic declarations in Vietnam?

Shall the authorities impose taxable revenue for household businesses paying taxes under periodic declarations in Vietnam?

Pursuant to Article 5 of Circular 40/2021/TT-BTC regarding tax calculation methods for household businesses and individual businesses paying taxes under periodic declarations as follows:

Tax calculation method for household businesses and individual businesses paying taxes under periodic declarations

1. The declaration method applies to large-scale household businesses and individual businesses; and household businesses and individual businesses that do not meet large-scale criteria but choose to pay taxes under periodic declarations.

2. Household businesses and individual businesses paying taxes under periodic declarations must declare taxes monthly, except for new businesses and those meeting criteria for quarterly tax declarations and choose to declare taxes quarterly according to regulations in Article 9 of Decree No. 126/2020/ND-CP dated October 19, 2020, of the Government of Vietnam.

3. Household businesses and individual businesses paying taxes under periodic declarations, if determining that the taxable revenue is not in line with the actual situation, the tax authority shall impose taxable revenue according to Article 50 of the Tax Administration Law.

4. Business households and individual businesses paying taxes under periodic declarations must implement accounting, invoices, and documents policies. If household businesses and individual businesses operate in fields or industries with confirmed revenue by competent authorities, they are not required to implement accounting policies.

5. Household businesses and individual businesses paying taxes under periodic declarations are not required to finalize taxes.

Thus, household businesses paying taxes under periodic declarations will have the taxable revenue imposed by the tax authority according to Article 50 of the Tax Administration Law 2019 if the taxable revenue is determined not to be consistent with the actual situation.

Shall the authorities impose taxable revenue for household businesses paying taxes under periodic declarations in Vietnam? (Image from the Internet)

What are the tax declaration for household businesses paying taxes under periodic declarations in Vietnam?

Based on Clause 1 of Article 11 Circular 40/2021/TT-BTC, which stipulates the tax declaration for household businesses paying taxes under periodic declarations as follows:

- Tax declaration form for household businesses and individual businesses according to form 01/CNKD issued together with Circular 40/2021/TT-BTC;

Download Form 01/CNKD Tax Declaration Form for Household Businesses and Individual Businesses

- Supplementary Appendix of business activities during the period for household businesses and individual businesses (applicable for household businesses, individual businesses paying taxes under periodic declarations) according to form 01-2/BK-HDKD issued with Circular 40/2021/TT-BTC. In cases where household businesses and individual businesses paying taxes under periodic declarations have a basis for determining revenue according to the confirmation of competent authorities, they are not required to submit the Appendix form 01-2/BK-HDKD issued with Circular 40/2021/TT-BTC.

Download Form 01-2/BK-HDKD Supplementary Appendix of business activities during the period for household businesses and individual businesses.

What is the deadline for submitting tax declaration for household businesses paying taxes under periodic declaration in Vietnam?

Based on Clause 3 Article 11 of Circular 40/2021/TT-BTC which stipulates the deadline for submitting tax declaration for household businesses paying taxes under periodic declarations as follows:

- The deadline for submitting tax declaration for household businesses and individual businesses paying taxes under periodic declarations monthly is no later than the 20th day of the following month after the month in which the tax obligation arises.

- The deadline for submitting tax declaration for household businesses and individual businesses paying taxes under periodic declarations quarterly is no later than the last day of the first month of the following quarter after the quarter in which the tax obligation arises.

When does a household business pay taxes under periodic declaration in Vietnam?

Based on Article 3 of Circular 40/2021/TT-BTC which provides interpretation of terms for household businesses paying taxes under periodic declarations as follows:

Interpretation of terms

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2. "Large-scale household businesses and individual businesses" are household businesses and individual businesses with revenue and labor scale meeting the highest level of micro-enterprise criteria or higher. To be specific: household businesses and individual businesses in the fields of agriculture, forestry, fisheries, industry, and construction with an average annual social insurance participation of 10 or more employees or total revenue of the preceding year of 3 billion VND or more; household businesses and individual businesses in the fields of commerce and services with an average annual social insurance participation of 10 or more employees or total revenue of the preceding year of 10 billion VND or more.

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4. "Household businesses and individual businesses paying taxes under periodic declarations" are large-scale household businesses and individual businesses; household businesses and individual businesses that do not meet large-scale criteria but choose to pay taxes under periodic declarations.

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Thus, household businesses pay taxes under periodic declarations in the following cases:

- Large-scale household businesses are businesses with revenue and labor scale meeting the highest level of micro-enterprise criteria or higher. To be specific:

+ Household businesses and individual businesses in the fields of agriculture, forestry, fisheries, industry, and construction with an average annual insurance participation of 10 or more employees or total revenue of the preceding year of 3 billion VND or more.

+ Household businesses and individual businesses in the fields of commerce and services with an average annual insurance participation of 10 or more employees or total revenue of the preceding year of 10 billion VND or more.

- Household businesses that do not meet large-scale criteria but choose to pay taxes under periodic declarations.